The pace of home purchasing in the Los Angeles market has quickened, apparently because of a stable--albeit higher-than-desired--interest rate and an improving economy.
On the average, houses are on sale for 76 days before the right buyer comes along. Nationally, it takes 83 days on the average for the sale of a listed property.
Los Angeles area brokers, participants in a national spring poll of brokers and consumers by Opinion Research on resale-market conditions, reported a noticeable drop during the last six months in the sales period.
Decrease in Selling Time
As expected, the average price of a Los Angeles area home was much higher than the average national resale price--$171,000 compared to $93,000. Among local broker respondents, 67% noted a decrease in the selling time.
About 27% reported an increase in prices over the same period, but 60% maintained that there was little difference in pricing.
On a timely issue--the possibility of congressional curtailment of tax advantages on a second home--the survey showed that 57% of 400 consumers considering owning a second or vacation dwelling would be "dissuaded from buying one" should such legislation be adopted. But, apparently, while the issue is being debated, the rate of such sales has been stable, according to 57% of the 420 brokers in 13 major cities throughout the nation who responded to the poll.
Buyers Will Hold Out
Also, about half of both brokers and consumers feel that Congress will not pass a law disallowing deduction of interest on loans for a second home.
On the issue of adjustable rate mortgages, the majority of brokers and consumers indicated that buyers will hold out for fixed-rate mortgages unless there is a differential of 2% or more.
Ed Gresham, president of Electronic Realty Associates, international realty franchise group which sponsored the concurrent poll, said such a differential would mean a significant dollar difference in monthly house payments.
"But we are interested in the evidence that people appear willing to spend up to $100 a month for the average mortgage as 'insurance' against the variability of an adjustable rate mortgage," he said.
He added that the current average mortgage amounts to $67,000. This translates to an average monthly payment of $741 for a 30-year fixed-rate mortgage at 13%, versus $638 per month in the first year of an 11% adjustable rate mortgage.
The consumer poll indicated too that Americans are becoming less mobile.
During their adult lives, 60% of the consumers surveyed have moved fewer than three times, they reported. But a "mobile minority" has moved more often. About 15% of the consumers said that to date, they have lived in more than six homes.